The Inter-American Development Bank (IDB) approved a loan of up to $15 million to Colegios Peruanos S.A.C. to help finance the expansion of a network of schools known as Innova Schools, which offer high-quality pre-school, primary, and secondary education with modern infrastructure at affordable prices to the country’s emerging middle class.
The financing, arranged by the IDB’s Opportunities for the Majority Initiative (OMJ), will allow Innova Schools to undertake the expansion of two of its existing schools and to build 21 additional schools in Lima and other cities of Peru. Six of the 21 new schools have already opened in 2011 and the remaining 11 will be built by 2015. The new schools will allow Colegios Peruanos to increase the number of students by over 23,000 in the next three years.
“Colegios Peruanos tackles one of the biggest challenges that Peru needs to confront as the country progresses in its economic and social development: to raise the quality of one of the poorest-performing education systems in the region, with a completely new academic model based on best global practices, and an intensive focus on the modern competencies that Peruvian students need to improve learning outcomes and become successful citizens’’ said IDB project team leader Susan Olsen.
Colegios Peruanos’ expansion comes as strong economic growth in Peru in the past decade fueled the expansion of an emerging middle class that today have limited options for getting their children a good education at affordable prices. Between 2003 and 2009, more than 1,000,000 families joined the middle class in the country. Despite their willingness to spend typically up to 20 percent of household income on education, the supply of schools serving their neighborhoods is either scarce and/or have deficient performance standards.
Originally founded by Jorge Yzusqui Chessman and more recently acquired by IFH Peru—the holding company of the Interbank Group—and the private equity firm Nexus, Innova Schools is the first chain of private primary and secondary schools to be financed by the IDB in the region. It seeks to contribute to the improvement of school educational outcomes in Peru by delivering a competency-based learning model designed to replicate international accreditation standards. This innovative methodology, centered on inquiry, collaboration, use of technology, reinforcement of character, and an intensive use of English, charges a competitive tuition per month, which is accessible for the target population.
Through a network of long term relationships developed with top Peruvian teaching faculties, Colegios Peruanos also strives to recruit the best and brightest teachers, ensuring that they receive bilingual training and learn the teaching methods that characterize the its academic curriculum.
In addition to the loan, the IDB has approved technical assistance funding to design and implement an impact assessment study. This evaluation will serve to measure the achievements of Innova Schools in terms of teaching and learning outcomes, and to determine in a more tangible manner whether and how its education methodology contribute the most to obtaining better results.
Aside from the loan, the IDB is structuring a syndicated loan of up to $10 million, both of which are expected to be disbursed in Peruvian Soles to complete the $75 million expansion plan to be carried out with funds from sponsors IFH Perú and Nexus in the next two years.
“Innova Schools is showing how the private sector can play a leading role in the transformation of our society by investing in the formation of human capital,” said Yzusqui, CEO of Colegios Peruanos. “Our strategy is to expand nationwide in emerging middle class districts and become the first company to offer top quality education for a segment of the population that has traditionally been underserved. Education is one of the key problems of our country. We will be viable in the long run only if we are able to distribute knowledge fairly.”
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